Who will win the location battle?

 In location

Google appear to be the front runners at the moment – is their lead assailable?

With Google’s current domination of the maps space thanks to Google Maps, and their recent upgrade of mobile maps to include my location, and the rumours circulating that soon they will open up their cell-ID database API to third parties – it is a reasonable assumption that Google is in the box seat.

But what does this mean for the rest of us? Is it in our best interests for Google to own this space as well?

For literally years and years, mobile operators have been trying to find the right business model for location. The first attempts involved installing location servers, and charging prohibitive fees to connect to them (growing an LBS aggregation industry), with additional costs per location poll equivalent to that of an SMS.

Lately, manufacturers such as Nokia have been adding GPS modules to phones, and A-GPS servers have been popping up. There is still a significant gap in the market between reasonably priced low accuracy cell-ID location and high accuracy GPS. Google is helping to plug this gap.

This week I have participated in some rigorous debate on what will happen in the location space. One point of view was that perhaps Google would charge for location lookups, keeping the status quo with the operators. Another view was that “every phone” would have GPS so Google would not win the location battle after all.

These two views warrant further examination to test if Google are worthy winners in the location debate.

Firstly – are Google likely to charge for access to their cell-ID database? I think not. There has been no precedent for Google to charge for access to their services. In contrast, Google encourage people to use their services (think GMail, Google Earth, Google Apps, You Tube, Google Maps etc etc) for free.

Millions of mashups, and a thousands of companies depend on free access to these services. The more people that use these services, the more eyeballs that can see a Google ad. For this reason alone, I believe that if Google were to open their extensive cell-ID database (without charge), it would initiate a step change in cellular location.

Clearly Google will need to manage access to their database, to ally privacy fears, but if we assume this can happen, it will allow developers of mobile applications, as well as websites wanting to supercharge their mobile offering to have an impressive new feature – location for little or no charge, without having to go via the operators.

I will leave for another post the sort of new location applications that might become a reality due to this possible move from Google – but you can just imagine how rapidly location enabled applications, and hence location based advertising will spread if Google were to make this move.

Once we have easy access to location, the next frontier will be zone detection – read more about this in a previous post which was also carried on msearchgroove.com. With zone detection, the ability to micro-target smaller areas (such as cinemas, plazas, coffee shops etc) will become a reality as this cannot be done with location alone.

On the GPS point raised above, of the 3 billion phones currently in the market, only a fraction have GPS. If location is to take off and be an enabler (as we have seen with SMS and GPRS), then it must be made available to all and not just those who buy a new phone. The issue of GPS availability indoors, and poor battery life will not go away faster than the Google cell-ID database will become available.

At a recent location conference in Amsterdam where I spoke and moderated a panel, the rumours about Google opening up their cell-ID API were confirmed by a number of mobile operators and the NokiaForum presentation all but announced they were to do the same. Coupled with that, I hear there will be a major location announcement from another provider at the London Mobile Monday event on July 14th – it all sounds rather exciting.

Even if Google don’t provide access to their cell-ID database first, the sheer coverage of their Google Mobile Maps my location feature – and subsequent extension of this capability to 3rd party developers will prompt others to provide access to their own databases – transforming the cellular location landscape forever.

Perhaps it is too early to open the champagne, but Google are a game changer on every front. We have them to thank for their independent approach to location, bypassing the carriers, but putting location firmly back on the agenda for a range of new services. For mobile advertisers – this is a major step forward to eventually allow location based advertising on a wide range of phones.

Ultimately this will benefit the whole mobile industry.

UPDATE: Since writing this post, I came across an article on mycustomer.com titled “Mapping out the future of location-based advertising?” where both Russell Buckely and Laura Marriott from the Mobile Marketing Association were asked for their thoughts on location based advertising.

Russell’s views are always worth listening to, but particularly in this case as he was intimately involved with one of the first location based start-ups, ZagMe in 2001.  The main issue for location based ads will be sourcing location enabled inventory. 

Russell argues that when they were running location campaigns it was already complicated “When we were at ZagMe we were only supporting two different locations and it used to take a team of five people two days to plan all the different offers – and that is just on two locations,” he explains. “So if you multiply that by 5,000 you can understand that it is very complicated. ”

He is correct.  Mobile advertisers I have spoken to are interested in conurbations at the moment (eg tell me if a consumer is in greater London, or Manchester or Birmingham) and NOT if they are within a 100m radius from a shop.

If you are able to target locations with a high degree of accuracy, you need to multiply the inventory, code it and make a split second decision to serve it – this is the difficult part.

So regardless of the technology – GPS, cell-ID, WiFi etc, we need to get the inventory right first – and this is not something that brands and agencies seem keen on doing at the moment. 

We need to get the basics right first before we make mobile advertising overly complicated – for the advertiser and for the consumer.

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Based in London, Practical Futurist and former Global Managing Partner at IBM, Andrew Grill is a popular and sought-after presenter and commentator on issues around digital disruption, workplace of the future and new technologies such as blockchain. Andrew is a multiple TEDx and International Keynote Speaker.

  • Good post Andrew. I would disagree with the statement that Google can be called the winner in the battle for location. Nokia has placed the largest bet so far with the purchase of NAVTEQ, Gate5, Trimble’s GPS patent portfolio and now Plazes as they move to tie location to every piece of media created with their devices. I would not count them out.

    Another point I was very happy to see in your post was the often misunderstood point that the hard part of location-based advertising is configuring, distributing, managing and reporting on location-relevant creative and campaigns at scale.

    My company, 1020 Placecast, has been running our location-relevant ad network across WiFi, fixed broadband and mobile for over a year and a half at scale with major band name advertisers like FedEx Kinko’s, Hyatt and Amtrak. Without our proprietary technology platform, real-time location relevant advertising (including location-enabling the inventory) would not be technically or economically feasible.

    The final challenge is sales. We have spent over 18 months building a direct sales force and educating agencies on how Placecast targets audiences using the vector of “place”, the combination of location and what Placecast knows about that location at that time.

    There’s a long road ahead, but from our perspective the value of location has already been proven!

  • Interesting and thought provoking post. The key to mobile is understanding the entire context in real time. By this I mean, Who am I, Where am I, and What device am I using and what are it’s capabilities.

    Location is only one leg of the stool, just like Zone. The more accurate the location the greater the opportunity to do something “IF” you have additional information.

    We’ve invented a technology that solves all three legs of the contextual stool. It will tell the content provider exactly where you are (GPS, Zone, Bluetooth,) in addition to exactly what the device is doing in real time, and more about Who I am and what I like.

    All of this “metadata” is controlled by the customer therefore if they want to share it with you, because you offer a great service – you get to see all of that data in real time whenever they contact your web site.

    More information here: http://www.5o9inc.com


    CEO 5o9 Inc.